The Wall Street frauds and scams will reveal themselves soon. The Obama administration is a willing accomplice in looking the other way due to the kick backs and fees collected.
I would again urge everyone to go see “The Big Short.” I plan on going to see it again. The on-screen rendition is that powerful and well-acted. It explains in “layman” terms what happened. For those who put their thinking cap on, the movie explains why what happened is happening again – in a re-packaged form.
The Big Short is a highly accurate portrayal of the rampant criminality of the Wall Street banks partnered with big government. They created fraudulent mortgage products, doled them out to suckers, and created complex toxic derivatives, selling them to clients while shorting them at the same time. The only problem with the movie was that it left the true villain off the hook with nary a mention. Wall Street could not and would not have created the trillions of fraudulent products if the government and the Federal Reserve had not kept interest rates at 1% and had performed their regulatory obligations of overseeing the banks.
While everyone is focused on Amazon’s news report that it added 3 million subscribers in the 3rd of December and had record package shipments this holiday season, causing the stock to pop up, I am focused on the truth. Of course AMZN had 3 million Prime subscribers right before Christmas. Why? AMZN was offering a one-month free trial to Prime. If you had not shopped yet for Christmas and had 2-day free shipping dangled in front of you – for free – of course you’re going to sign up.
Let’s see the “churn and burn” rate for the people who have subscribed to the free-trial promotion. I can guarantee you that AMZN will not publish those numbers.
Record shipping? Economic theory teaches us that when something has no cost, demand is infinite until saturated. I personally know people in NYC who bought toilet paper and paper towels from AMZN because free delivery is cheaper than taking a cab to the grocery store. And who wants to schlep big armloads for grocery supplies around the streets of NYC?
Markets become irrationally overvalued because, in general, people have a tendency to overprice “hope” and “optimism.” It’s human nature to deny the negative side of reality. As a result, the market tends to “under-price” the probability of a negative outcome. This dynamic presents opportunity for those willing to examine the truth.
What is missed on this is that AMZN loses money on its Prime membership business. It has admitted this. But the push up in the stock price greatly benefits Jeff Bezos, as he automatically unloads 100,000’s of shares every month.
From an article by the Short Sellers Journal